Interior’s proposal for offshore leasing: 0-11 sales over next 5 years

The Biden administration has proposed a 5-year offshore oil and gas leasing program that would allow for up to 10 lease sales in the Gulf of Mexico and one in Alaska’s Cook Inlet. It also is considering the option of allowing no sales.

The Interior Department released its 2023-28 proposed program, the second stage of the three-stage process, July 1. The proposal is to be published some time later this month in the Federal Register, along with a draft programmatic environmental impact statement, followed by a 90-day public comment period for both.

The Gulf of Mexico sales would be in the eastern and central regions, as before.

The final program may include fewer than 11 lease sales or none, Interior said. The option of none drew the attention of two members of Congress.

“I am disappointed to see that ‘zero’ lease sales is even an option on the table,” said Sen. Joe Manchin (D-W.Va.), stressing the importance of leasing programs to US energy security and the needs of our allies. “There is already more than enough flexibility in the program to adjust sales later.”

Rep. Raul Grijalva (D-NM), chairman of the House Natural Resources Committee, expressed a very different view, saying new offshore lease sales over the next 5 years “will do nothing to help lower prices at the pump, and it will make our emissions goals virtually impossible to achieve.”

Grijalva expressed hope that Interior would issue a final program with no offshore sales.

Interior Secretary Deb Haaland, as part of the announcement of the proposed program, said “from Day One, President Biden and I have made clear our commitment to transition to a clean energy economy.”

Worried about investment

This is the first year since 1965 that the federal government will not hold an offshore lease sale, according to the National Ocean Industries Association (NOIA).

One sale was held in 2021, but that was canceled by a federal judge, making it 2 years without a completed sale.

“We are in the middle of a substantial, unnecessary, and avoidable gap in offshore leasing that is having serious impacts for both near-term and long-term investment in US energy production,” NOIA president Erik Milito said. He urged the administration to act swiftly to finalize and implement the program.

“The final offshore leasing program must include multiple, region-wide lease sales per year in the Gulf of Mexico to provide the flexibility necessary for companies to adapt to rapidly changing market conditions and to pursue the most promising geological prospects of hydrocarbons,” Milito said.

“Including two lease sales per year in the Gulf of Mexico—as proposed—supports the long-term competitiveness of the US offshore,” he said.

Hands off Atlantic, Pacific

Interior noted the flexibility built into the offshore leasing program, which is mandated by the Outer Continental Shelf Lands Act (OCSLA) and carried out by the Bureau of Ocean Energy Management (BOEM).

“There is no requirement under OCSLA that mandates any sales in any locations, nor does the law prescribe any specific timing for the development of a 5-year plan,” the Interior announcement said.

The proposed plan ruled out leasing off the Atlantic and Pacific coasts—a preservation of the status quo. The draft proposed rule, issued in January 2018, included possible drilling in 25 of 26 Outer Continental Shelf planning areas, including all of the Pacific and Atlantic coasts.

A draft proposal is essentially a conversation starter. The conversation in 2018 became a storm of opposition from coastal Democrats and Republicans alike.